The Meanest And Nastiest Thing
→by the Mysterious Flying Miser
From Bloomberg:
“Banks repossessed almost three times as many U.S. homes in July as a year earlier and the number of properties at risk of foreclosure jumped 55 percent as falling prices made it harder to sell or refinance.
“Bank seizures rose 184 percent to 77,295, the steepest increase since reporting began in January 2005, RealtyTrac Inc., an Irvine, California-based seller of foreclosure data, said today in a statement. More than 272,000 properties, or one in 464 U.S. households, got a default notice, were warned of a pending auction or foreclosed on. ‘It’s getting worse,’ Rick Sharga, RealtyTrac’s executive vice president for marketing, said in an interview. ‘The number of properties that have been foreclosed on by the banks and still haven’t sold is the highest we’ve ever seen.’
“… Bank seizures, known as real estate-owned or REO properties, are the ‘fastest growing segment of foreclosure activity,’ James Saccacio, chief executive officer of RealtyTrac, said in the statement. The REO properties in the company’s database represent about 17 percent of the inventory of existing homes reported in June by the National Association of Realtors, he said.
“Default notices in July increased 53 percent from a year earlier and auction notices rose 11 percent, RealtyTrac said. The June total of 252,363 reflected an ‘artificial depression’ due to new state laws designed to help homeowners avoid foreclosure, Sharga said.”
From the Milwaukee Wisconsin Journal-Sentinel:
“For years, lenders complained about debtors who left the keys on the kitchen table and skipped town, leaving it to the bank to file for foreclosure and eventually take title by buying it at a sheriff’s sale. The latest twist: Now it’s the lenders who are doing the walking, often without telling the borrowers, who may believe erroneously they have already lost title.
“‘This is just the meanest and nastiest thing (lenders) could do,’ said Catherine Doyle, chief staff attorney at the Milwaukee Legal Aid Society. ‘Even more profound is the terrible damage to the community. All of us are going to have to bail them out.’
“City officials, lawyers and community activists say they’ve seen an increase in lender walkaways, although they can’t estimate how large the problem is. The Journal Sentinel found more than $400,000 in back taxes, fees, and demolition costs owed on nearly three dozen properties that lenders foreclosed on in the past two years but didn’t complete the process. Three more have been condemned and are scheduled to be bulldozed at an estimated cost of up to $15,000 each.
“‘I don’t like hearing about money owed to the city at a time when the city is strapped financially,’ Mayor Tom Barrett said. ‘That’s a concern. That’s a huge concern.’”
From the Tampa Tribune:
“The single-story duplex at the far end of East Idell Street in Sulfur Springs had been abandoned by its owners after the bank began foreclosing on the mortgage.
“In July, Tampa officials bought the home from Bay Holdings Inc. for $28,800, roughly $110,000 less than the previous owner paid for it three years ago, and sent in the bulldozers. The demolition marked the beginning of Tampa’s new program to buy foreclosed and abandoned homes in neighborhoods hardest hit by the nationwide mortgage crisis. Eventually, a single-family home will be built on the property.
“Money to buy the properties is coming from Tampa’s $13.6 million share of funds from the U.S. Department of Housing and Urban Development’s $3.92 billion Neighborhood Stabilization Program”
“The demolition marked the beginning of Tampa’s new program to buy foreclosed and abandoned homes in neighborhoods hardest hit by the nationwide mortgage crisis. Eventually, a single-family home will be built on the property.”
So the solution is to build more houses? Did I wake up this morning in bizarro land?
Now you know darn well that in Bizarro land officials wouldn’t be encouraging building when inventories are too high. Public officials would be reasonable and smart people, who made decisions based on logic and not emotion. There would be no hyper-consumers and saving would be taught in school.
Bizarro land would drive us all insane after living in this world.
I wonder if the candy crapping unicorn exists in bizarro world, but no one believes in it?
“I wonder if the candy crapping unicorn exists in bizarro world,”
Just don’t look up at the sky with your mouth open.
But…it’s candy!
…Right?
Well knocking down a duplex and replacing it with a SFH does cut the housing supply in half there.
Point taken.
Dennis;
not if a mehiken moves in with 10 family members and 7 cars…and an illegal trailer or 2 in daback
“daback”
I was at Racetrac Petroleum, gassing up the old buggy the other day, and went inside the store to pay. In front of me was a young gal with butt cheeks longer than her shorts, a splendidly colorful array of tats, a sparkly little nose piercing and a fake designer handbag. To her credit, she was slim and not the size of a whale. Anyhoo, she points to a cigarillo (do people still actually smoke these?????) in the glass counter case and says to the clerk “I want dawwon”. Meaning, “I want THAT ONE”. Language is changing. I’d say it is degrading, but then again, I don’t speak Chaucer’s English.
I’m sure she is a victim, somehow.
She could have at least said “May I have dawwon, please”!
Oh, hell yeah, I don’t know what it was, but most of the people at the Racetrac looked like something out of the movie “Freaks”. I’m not kidding. I got out of there FAST, because I didn’t want to catch whatever it was, but it struck me that there’s some sort of genetic mutations going on with people’s bodies. I’m starting to notice this at WalMarts and gas stations around here. It’s like District 9.
I encourage everyone to watch Judge’s movie Idiocracy:
http://en.wikipedia.org/wiki/Idiocracy
Palmy,
My circle of friends refers to these people as “mutants.” We are noticing more “mutants” everywhere. By the way, we are a very open-minded and cool crowd.
I saw Idiocracy, and that movie seems to be somewhat prophetic. Although, I don’t think the idiocrats are going to have quite the freewheeling, fart-filled existence portrayed. It’ll be more like dumb animals in harness, with feedsacks attached to their gaping maws.
Now, Beachchic, I thought it was just my frame of mind, but I guess mutants really do exist. Many of them look sort of misshapen, like they were twisted at the waist or something.
I’m wondering if there’s a higher incidence of birth defects due to the polluted food supply.
Oh, hell yeah, I don’t know what it was, but most of the people at the Racetrac looked like something out of the movie “Freaks”
Palmy, I hope they are the ones getting the mutant flu shots. Am hearing more deaths due to the mutant flushotpool.
I don’t understand piercings and rampant tats.
Don’t get it. Guess cause the majority of my life I have lived around senior citizens and have observed what aging can do to the majority of people and their bodies.
Except these were folks in their 20s-50s. I can’t imagine they’ll make it to their 70s, they look like the walking dead already.
Yep, the flu shots are indeed scary.
“My circle of friends refers to these people as “mutants.” We are noticing more “mutants” everywhere.”
In Australia, we call ‘em “Ferals” - as in, they used to be domesticated, but they’ve gone …… feral.
“Sulfur Springs, North Tampa and West Tampa have been identified as target areas, based on the high rates of subprime mortgages, mortgage defaults and delinquencies.”
Oh, hell yeah! Three suck-azz areas. Might as well just take the money up in a helicopter and shower it over Tampa Bay. LOL, yep, there’ll be all this balley-hooing over the Habitit for Humanity home built on that site. Coupla years later, no one will ever hear how that house has also been abandoned.
BTW, I was out driving the back roads of Ruskin (for new posters, Ruskin in a semi-rural area at the southern end of Hillsborough County, Florida, in which Tampa is located) on Friday, and what did I spy? A HUGE area of land cleared to expand Bayou Pass, a USDA funded subsidized housing development in concert with the Florida Home Partnership.
http://www.flhome.org/
Where in the name of Jeebus is all this money coming from? The USDA has its meathooks way into Southern Hillsborough area. http://www.observernews.net/artman2/publish/Top_Stories/County_Playing_Role_in_Local_Infrastructure.shtml
I couldn’t believe it when I saw that huge area of cleared land with all the development signs posted.
“Where in the name of Jeebus is all this money coming from?”
No probola. As long as the printing presses work, the g’ment will always have an endless supply of dineros!
I think Sulphur Springs, once upon a time and before the groundwater became polluted, was nice — periodically an octogenarian native will give a newspaper account of cutting class in high school and going for a swim there. Some of the roads are almost canopied with trees dangling Spanish moss. Of course now it’s one of the worst areas in Tampa, where Dwight Gooden used to get into trouble. Are there any areas in this state near a dog track that aren’t crime-ridden?
As for West Tampa, at the beginning of the bubble there was an attempt to rehabilitate it, but I don’t think it got anywhere, because flipping houses doesn’t build a community.
You woke up in Superman’s world. Bizzaro world belongs to the Superman genre.
“All of us are going to have to bail them out.”
She does not know about the owners/buyers of precious metal bullion, AAA municipal bonds, and Roth 401ks/IRAs. Some of those owners/buyers do so precisely because they do not agree that any responsible saver has to bail out anyone.
Holy Poop Palmy! They ARE gonna bulldoze them, ain’t they?
Wait’ll you see my post on the expansion of a subsidized housing development here in Ruskin. I about messed myself when I saw it.
Yep, that gubmin money’s sloshing around all over the place.
All that money sloshing around, but WE can’t have any, because it has been reserved for the subsidized class.
Or corporations, just not us in the middle, is what I am observing,
is it just cause I don’t know where to look for it?
Maybe I will order that book, Free Money, by Trudeau..
I find it ironic that they’re bulldozing and building at the same time. Stimulus money, anyone? Easy come, easy go, I guess.
It’s disgusting. What a complete waste of money. First of all, they made some infestor whole. Paid 28,000 for a lot which is probably worth maybe $7,000. And then shelled out for the dozing. Now they’re gonna pay to build a house that will probably end up abandoned, also.
Palmy:
Maybe its an Internment camp for the ghetto types maybe some barbed wire on top of 15 foot concrete walls
Now THAT would be a very profitable use of taxpayers money.
The Finance, Insurance, and Real Estate industries are one of the biggest contributors to government at all levels, for a very good reason. And we’re seeing it. They’re able to “vote” themselves money.
“‘I don’t like hearing about money owed to the city at a time when the city is strapped financially,’ Mayor Tom Barrett said. ‘That’s a concern. That’s a huge concern.’”
Ground control to Mayor Tom: What’re ya gonna do about it?
Somebody is PO’ed at Tom Barrett.
Milwaukee Mayor Tom Barrett was in the hospital on Sunday after he was attacked by a person using a metal pipe as the mayor and his family left the Wisconsin State Fair.
Barrett was in stable condition Sunday at a local hospital and was alert and talking when he arrived there on Saturday night, the Milwaukee Police Department said in a statement.
http://news.yahoo.com/s/ap/20090816/ap_on_re_us/us_milwaukee_mayor_attacked
I think Mayor Barrett has bigger concerns this morning.
MILWAUKEE, Wis. — Milwaukee Mayor Tom Barrett was in the hospital on Sunday after he was attacked by a person using a metal pipe as the mayor and his family left the Wisconsin State Fair.
Barrett was in stable condition Sunday at a local hospital and was alert and talking when he arrived there on Saturday night, the Milwaukee Police Department said in a statement. It did not provide more details, and a spokeswoman for the police department did not have any further information.
Police said Barrett was leaving the state fair on Saturday night when he heard a woman crying out for help in the city of West Allis, about six miles west of Milwaukee.
Police said Barrett began calling 911 when the suspect who was attacking the woman charged at the mayor and began hitting him with a metal pipe. The suspect then fled the scene, authorities said.
The woman was not injured, and police were still searching for the suspect, who has a criminal arrest record, authorities said.
OOPS! This dude just like accidentally attacked the mayor. He meant to merely attack some inconsequential female in the parking lot, probably assuming that the cops would never bother to find him afterwards. I wonder how long it will take them to have him shackled to his own ankles after this one.
Can’t say that the prospect of this guy’s incarceration disturbs me.
“Tampa officials bought the home from Bay Holdings Inc. for $28,800, roughly $110,000 less than the previous owner paid for it three years ago, and sent in the bulldozers. Money to buy the properties is coming from Tampa’s $13.6 million share of funds from the U.S. Department of Housing and Urban Development’s $3.92 billion Neighborhood Stabilization Program”
Cut to Pizza the Hut eating himself.
“U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program”
I’m a mog! Half man, half dog. I’m my own best friend!
““In July, Tampa officials bought the home from Bay Holdings Inc. for $28,800, roughly $110,000 less than the previous owner paid for it three years ago”
I knew it, I’m surrounded by assholes!
“Neighborhood Stabilization Program”
Slums for the Subsidized.
Add a voter registration program to the mix and “Mission Accomplished”.
Barf: What the hell was that?
Lonestar:
Spaceball 1Foreclosures!Barf: They’ve gone to plaid!
LOL
Perhaps if banks were required to pay market rates for their bailout insurance, then they would not have such a tendency to blow up every few years. While I applaud the F.D.I.C.’s efforts to get banks to pay premiums, part of me wonders if the banking system would not run better if the banks had to buy insurance on the private market.
Further, I keep wondering if financial markets would not function better if the too-big-to-fail free bailout insurance program the Fed has run since 1913 were permanently deep-sixed. It seems rather obvious from the increasing frequency and amplitude of financial crises that the Fed’s crisis management program is a failure. What’s worse, the Fed’s crisis management regime looks an awful lot like a giant vacuum cleaner designed to perpetually sweep wealth away from Main Street and towards Wall Street. It is time to end the denial and to start reforming the system. Is anyone in the Fed leadership up to the task at hand?
FED is a big problem. i’m not sure i understand completely what FED does. however, i do know that it caused the whole problem by making money cheap with low interest rates. FED ain’t smart enough to set rates. no one is. therefore there should be a free market in money, letting the market set the rates. when money is made cheap it will ALWAYS be mal-invested. why do we never learn that lesson?
“…therefore there should be a free market in money, letting the market set the rates.”
The idea sounds simple enough, until you start mulling over the details.
- Are you suggesting that more than one bank should own a money press?
- Who would regulate this system, and how?
- How would the taxing authorities collect?
- Has this approach worked in any other developed economy?
- What would prevent severe inflation or deflation if there were multiple printing presses in competition?
- What about the trade implications of multiple competing currencies?
Or did I misunderstand your suggestion?
Make us more fiscally competent. Every 6 years we vote for a Fed team. At least make it a more level playing field by allowing consumers to yay or nay whoever prints the fiat.
FED used to let the market set interest rates. i believe the latest attempt to set rates began in 1994. at a matter of fact, this is the third or four time FED has attempted to set rates. each prior time FED was forced back to letting the market set rates because the amplitude of the swings in the market began threaten the system. but each time as the markets healed the geniuses at FED throught they could do a better job than the market.
as i understand it, FED origninally had only one mandate, to control inflation. they could handle that OK. but sometime ago, they were given a ‘dual mandate’. (for more details, google “dual mandate & FED”). anyway, the dual mandate added full employment to the mix. turns out that that isn’t easy to do. maybe it’s impossible.
as peter schiff said, we don’t want to hand the reins in money supply over to pelosi either should we should be very careful about getting rid of FED. but cleary FED has screwed us up. so i’m not sure if we should get rid of the federal reserve or not. i lean towards getting rid of it, but we have to be very careful. it might be a disaster for us if we do. but if we do keep FED, we need to get them out of the business of setting interest rates. if interest rates were set by the market the housing fiasco could have never got started because the interest rates would always reflect the risk in the markets. rates would have moved higher before the bubble began, keeping home prices lower and ending all the rest of the bubbles before they started too. it was FED’s pretense to knowledge that caused this whole mess.
i’m among those that believe a slow deflation is not only natural but good. as productivity and efficiency increases, prices decrease naturally. of course governments hate that because the tax base gets smaller with deflation. what they don’t see is that it wouldn’t matter because the value of the money they collected would increase. government paradoxically would be better off with natural deflation, but of course they never see that. consider:
deflation is good for:
spenders: because goods are cheaper
savers: because value of money increases
business planners: because the value of money actually slowly increases making lending safer and yet more costly when there is a failure. there they have more incentive to make sure they have a good business plan.
everyone else too: because an honest currency encourages honesty in the population. there would be less scheming because there would be much less need to scheme.
deflation is the natural and good result of a free market economy. but governments have bamboozled most of us into believing that inflation is necessary. it is not.
i believe it would be possible to keep the FED and still have a sound honest currency. but still, i don’t claim to understand the machinations of FED.
i hope i have directly or indirectly answered the points in you question. i don’t claim to know how FED works exactly, but i do know things they have done in the past that don’t work.
deflation is ’supposedly’ bad for:
governments: because their tax base gets smaller. (they collect less money)
FED tries to maintain as steady 2% inflation rate because they believe it is ‘good’. they are wrong. now they have brought us to the edge of total disaster.
tj:
The Constitution says that Congress is supposed to control the value of money, so “handing the reins over to Pelosi” is exactly what’s called for.
We haven’t always had a central bank. I think the current one is like the 3rd or something. I really should look this stuff up before I go talking about it, but you know. Well, during non-central-bank times, the value of our currency fluctuated so much that ppl really had a hard time. That’s why they decided to do the central bank thing once again.
I think the trick with the central bank is appropriately balancing the power of Congress with the power of the bank itself. If you give Congress too much control, then the central bank will have its hands tied by ephemeral politics. If Congress goes to lunch, however, (as they recently have), then the central bank will only watch out for the banking industry itself (particularly for the Federal Reserve banks themselves).
The Federal Reserve in its current form is clearly not working. Their unspoken policy is to transfer as much value as possible to the banking industry through deregulation, stupid low interest rates, and bailouts. The same agenda has followed through to Wall Street, where the Federal Reserve banks are happily earning excess capital through stock sales (backed by companies that would have no value if it weren’t for taxpayer-funded subsidies).
Congress needs to get its act together and pare down the Federal Reserve down to its original (limited) scope. They need to once again separate depository institutions from investement banks, establish an actual reserve limit, and allow anti-trust laws to prevent the formation of “too-big-to-fail” banks. Fannie Mae and Freddie Mac are also related culprits, but that’s another thread altogether.
Big V,
Thanks as always for your post, and it was good to meet you in person recently.
I am curious about whether and when you think the debate about the future role of the Fed will “trickle up” from the blogosphere to the inner circle of the beltway? I certainly hope this plays out before a chairman reappointment decision is ramrodded through the policy process, as to my knowledge, there has so far been no meaningful discussion of the Fed’s role in creating the mess at hand, nor of how to reconfigure the system to avoid a repeat over the span of the next several decades. One of the beautiful aspects of never-ending crises is they give the PTB carte blanche to act above scrutiny or debate of alternatives.
Hi PB:
Right now, I think most members of Congress are feeling completely blindsided by this. Questioning the value/role/”independence” of the Federal Reserve hasn’t been politically viable since the agency was created a long time ago. I don’t think there are many Congressfolk who even grasp how the Federal Reserve works or how Congress could possibly control it. Of those who understand it, even fewer would be willing to take the responsibility of suggesting a change.
Eventually, as people grow more and more wary of the PTB, and start to see real suffering due to the falling value of the dollar and rising power of the big banks, they will elect someone with the nards to stand up to these guys.
Audit the Federal Reserve: HR 1207 and S 604
Ron Paul’s bill to audit the Federal Reserve (HR 1207) now has 282 co-sponsors, and the numbers keep growing! HR 1207’s companion bill in the Senate, S 604, has already attracted 23 co-sponsors-
http://www.ronpaul.com/on-the-issues/audit-the-federal-reserve-hr-1207/
BV: The Constitution says that Congress is supposed to control the value of money, so “handing the reins over to Pelosi” is exactly what’s called for.
more accurately, the constitution mandates government ‘coin’ currency. no fiat allowed. i believe that FED is unconstitutional too. but i don’t know what would happen if it were dismantled.
—————
BV: We haven’t always had a central bank. I think the current one is like the 3rd or something. I really should look this stuff up before I go talking about it, but you know. Well, during non-central-bank times, the value of our currency fluctuated so much that ppl really had a hard time. That’s why they decided to do the central bank thing once again.
i believe you’re correct. i also haven’t verified everything. i’m going from what i remember which might be inaccurate.
————-
BV: I think the trick with the central bank is appropriately balancing the power of Congress with the power of the bank itself. If you give Congress too much control, then the central bank will have its hands tied by ephemeral politics. If Congress goes to lunch, however, (as they recently have), then the central bank will only watch out for the banking industry itself (particularly for the Federal Reserve banks themselves).
yes, i believe that FED’s number one concern is the banks in their system. but they have to be publically appearing to serve the dual mandate (which appears impossible to do since raising or lowering interest rates necessarily affects employment). if one affects the other how can they independently attend to each? they can’t. the dual mandate appears to be impossible to me.
————
BV: The Federal Reserve in its current form is clearly not working. Their unspoken policy is to transfer as much value as possible to the banking industry through deregulation, stupid low interest rates, and bailouts. The same agenda has followed through to Wall Street, where the Federal Reserve banks are happily earning excess capital through stock sales (backed by companies that would have no value if it weren’t for taxpayer-funded subsidies).
but it might work again if they went back to their original purpose.. price stability. but to me, price stability doesn’t mean 2% inflation. and that’s what they’re trying to do. i think that’s even according to bernanke. on top of that, the workings of FED are complex and secret. i don’t trust FED but i can’t say for sure that we can get rid of it without dire consequences.
————-
BV: Congress needs to get its act together and pare down the Federal Reserve down to its original (limited) scope. They need to once again separate depository institutions from investement banks, establish an actual reserve limit, and allow anti-trust laws to prevent the formation of “too-big-to-fail” banks. Fannie Mae and Freddie Mac are also related culprits, but that’s another thread altogether.
i don’t trust the yahoos we have in congress now to get anything right. the main culprit in the most recent crisis was greenspan. he kept rates too low and made money cheap. cheap money almost always finds a way to get mal-invested. he says he didn’t know this would happen, but i really find that hard to believe. how could he not know he was creating a mess?
This is the glorious leader of the FED
http://www.youtube.com/watch?v=HQ79Pt2GNJo
I think the video might have been posted here before but it is worth watching again!
Who really believes this guy? Too much power and arrogance mixed together.
The bit about Bernanke dispelling the myth of a housing bubble was when he worked for the White House (now Chairman of the FED) and then you have Turbo Timmy who was head of NY FED and is now head of IRS and Treasury. Incestuous much??? Let’s not even speak of Paulson or Goldman …
(Cue Emily Litella):
Well, at least you have to hand it to Bernanke for finally coming clean and admitting the whole housing debacle was enabled and abetted by super-easy money from the Fed earlier this decade.
What did you say — he didn’t acknowledge the Fed’s part?
Never mind … b!tch.
PB,
Thanks for this brilliant statement:
“What’s worse, the Fed’s crisis management regime looks an awful lot like a giant vacuum cleaner designed to perpetually sweep wealth away from Main Street and towards Wall Street.”
That pretty much sums up the efforts of Geithner and Bernanke. I’ve long ago given up on counseling folks that the pump-and-dump, lather-rinse-repeat of the markets are going to leave them wet and withered.
Wall Street wins - you lose.
House of Cards.
Just watched cnbc show. And Greenie still didn’t admit to any responsibility.
The New York Times
BB&T Takes Over Failing Colonial BancGroup
By ERIC DASH
Published: August 14, 2009
Wall Street’s biggest banks may be roaring back to life, but trouble still lurks in corners of the financial industry that remain plagued by a legacy of bad investments.
On Friday, Colonial BancGroup, a large lender that rode the excesses of the nation’s real estate boom, was seized by federal regulators, making it the largest bank failure of 2009 and one of the most costly since the collapse of IndyMac Bancorp last year.
…
The deal ensures that the bank’s depositors will not suffer losses, although its stockholders will be wiped out. But the F.D.I.C.’s industry-supported insurance fund will be liable for a big portion of Colonial’s $25 billion loan portfolio.
The F.D.I.C. will absorb all the losses on a $3 billion pool of the most risky assets, including those believed to be entangled in fraud, according to a person briefed on the pool. Federal regulators will split the losses with BB&T on another $15 billion pool that is largely made up of commercial real estate and construction loans. BB&T will be responsible for losses on the remaining $7 billion worth of assets, which it will own outright.
Federal regulators have offered similar loss-sharing arrangements to lure prospective buyers for several other seized banks. With the number of bank failures expected to rise, F.D.I.C officials have grown increasingly concerned about protecting the deposit insurance fund. It had been drained to about $13 billion at the end of the first quarter, the latest number available, and some banking experts are worried that the agency might be forced to turn to an emergency credit line from the Treasury Department for short-term funding.
That, in turn, could put even more pressure on the banking industry if the F.D.I.C. imposed another costly assessment on banks. “Banks need that money to rebuild capital so they can lend more,” said Jaret Seiberg, a financial policy analyst in Washington.
…
But mom, I need that money (that you found stashed in my closet along with my crack) to rebuild capital so I can buy more crack.
Mish says the FDIC is bankrupt as of this past Friday evening.
http://globaleconomicanalysis.blogspot.com/2009/08/as-of-friday-august-14-2009-fdic-is.html
Crikey. Maybe I should be getting my moolah out of the bank and into the mattress.
Why does nominal bankruptcy matter? Can’t the Fed print them a lifeline, similar to the one they print for Megabank, Inc? Or is there a possible problem with uppity Shela Bair’s recent efforts to stand up to the central bankers in high government posts?
Didn’t Potty Mouth Timmay curse her out? Not looking good for that emergency credit line from the Treasury.
I thought it was “Toilet Tonsils Timmay”.
I thought it was Turbo Tax Timmy. Sebelius didn’t pay taxes either. Maybe I could go to work for the Mesiah and not pay taxes either.
“Didn’t Potty Mouth Timmay curse her out?”
Yep — he sure did show the world how macho he is by putting this female regulator back in her place, didn’t he? (Gulp…)
Caution: This story may produce death by laughter and/or Schadenfreude overdose.
Fallout The Recession in Six Figures
Squeaking by on $300,000
A Tight Grip on the Good Life
Laura Steins lives in a New York suburb where Wall Street’s boom years pushed the standard of living to astonishing heights.
By Anne Hull
Washington Post Staff Writer
Sunday, August 16, 2009
HARRISON, N.Y. — The live-in nanny is the first downstairs. She packs the school lunches at a kitchen window, overlooking three acres of velvety grass and little streams that slope toward a gate with a sign that says “Birch Hill.”
Upstairs, three children begin to stir.
In the midst of cheese omelets and Honey Bunches of Oats and vitamins placed next to folded napkins, the lady of the house descends.
“Morning,” says Laura Steins, 47, wearing a dark Armani suit and take-charge heels. Her blue eyes are lustrous and her skin is golden, and even with wet hair and no makeup, she radiates confidence.
But she’s months overdue for a visit to her colorist, a telltale sign of economic distress for a woman such as Steins. The smell in the basement could mean a crack in the septic line; unlike a $200 hair appointment, a plumber will be in the thousands. And from the breakfast table comes one more urgent need from a 10-year-old.
“At my birthday party, every single girl had a phone,” says Katie Steins, making the case that an enV2 phone with matching cover is just standard in her crowd.
Steins kneels down to face her daughter. “If you continue to tell the world how undesirable your phone is — it’s not a flip, it’s not a swivel, it’s not an LG — you will not have a phone.”
Steins takes a breath. Life in this $2.5 million house was built on the premise of two incomes, not the income of a divorced mother of three in a tanked economy. Her property taxes are $35,000 a year, the nanny is $40,000 and the gardener is $500 a month.
“I can ride this storm out,” says Steins, which means having tiger-striped hair and getting her kid a generic cellphone and ignoring the stinking basement.
…
Steins is about to have some new neighbors, lol. I grew up in Westchester. It was an awesome place to come of age. Glad I’m not there anymore, though.
http://online.wsj.com/article/SB124993778549420475.html
How can anybody write this garbage?
““Morning,” says Laura Steins, 47, wearing a dark Armani suit and take-charge heels. Her blue eyes are lustrous and her skin is golden, and even with wet hair and no makeup, she radiates confidence.”
This lady is toast. If the house is mortgaged to the tune of $2.5 million then $300,000 per year is nowhere near enough to remain solvent. That alligator, with taxes and upkeep, would have a monthly payment of $20,000 or more. I bet she has leveraged it to the hilt. It’s just a matter of time for her to be a high-end statistic.
“To the untrained eye, the long economic downturn as viewed from here and beyond — the hedges and country clubs of Westchester County that stretch to Long Island Sound — has been hard to see or feel. ”
That’s nonsense. The upper crust is scared witless right now. The poseurs like this woman are shi–ing in their pants. That might be a positive since her septic system doesn’t work anymore. Westchester has some at the top that could ride out anything. But the vast majority are still wage slaves that wanted to pretend that they weren’t wage slaves. The next couple years will wipe out a lot of Laura Steins, including Laura Steins. The humbling of the lesson will do them much good.
She might also want to have that mole on her chest checked out.
“One of Wall Street’s top-ranked metal analysts who volunteers in prisons is putting together a program to teach inmates about finance. A woman whose son left Goldman Sachs to join a small boutique firm worries about the stress of his long workdays. “People say these guys aren’t building anything or making anything, all they do is make money all day long,” she says gently. “There’s a lot of high blood pressure. They don’t see their children. Panic attacks are common.”
Get out that tiny violin. And I about killed myself laughing over the Wall Street metals analyst teaching inmates about finance. Gawd, That’s. Just. Perfect.
Loved reading the lists of the country clubs and shore clubs. They used to have some awesome summer shindigs for teens. “Smokin’ in the boys’ room, yes indeed!”
‘“People say these guys aren’t building anything or making anything, all they do is make money all day long,” she says gently.’
Mom knows best about what Junior does all day long.
When she bought out her husband’s share of the house after their 2006 divorce, she assumed the costs of keeping it afloat — $8,000 to $10,000 a month.
The husband got lucky selling out to her in 2006.
There’s a pool man, a gardener and someone to plow the snow from the quarter-mile-long driveway.
She should get the plow attachment for her SUV.
They don’t make gold diggers like they used to.
Let’s be nice, palmy. We don’t know if she married him before or after he started earning the big dollars.
On the other hand, his “new wife” might more aptly be called a gold digger.
“…Being a mother on her own in married suburbia requires courage”
(Hwy wonders if she’s gotten up the…”courage” to…)
“…There’s a pool man, a gardener and someone to plow the snow from the quarter-mile-long driveway.”
It’s like reading old tales of Abigail Adams. The two women are so much alike. It’s scary.
They’ve been culling the herds? Were the recent absences of FPSS and NYCBoy actually due to … blood sports?
Just in my experience, people like Ms. Steins have few real friends and are rarely happy. The requirements of that social stratum take a toll not just on the wallet, but on the soul. And I agree that she’s got to be spending more money than she has coming in. But she works for a credit card company, so it’s not like she can publicly walk away from the house.
This article just seems bizarre. Are we suppose to feel sympathy for someone who’s gross annual pay of $300K puts her in the top 1% of earners? Can’t she cut back on her expenses?
Spend Spend Spend…..who boy are these kids in for a major life readjustment this year
—————–
“Mom, did you know that if you are the billionth app loader on iTunes, you get a 32-gig iPod touch, a MacBook and a $10,000 gift card for iTunes?” asks Harrison, who is 12 and the oldest. Christian is 8 and often comes to dinner in a cape. Katie, in a Little Miss Lucky T-shirt, tries to hold her own against the two boys.
“the number of properties at risk of foreclosure jumped 55 percent as falling prices made it harder to sell”
falling prices make it easier to sell because more people can afford to buy. selling at higher prices can’t be done! you’ve proved by sitting on the house for years at your ‘wishing’ prices.. falling prices are good for sales and bad for higher wishing prices (no sale!).
“…falling prices are good for sales and bad for higher wishing prices…”
Affordable housing is great for mortgage lenders and used-home sellers alike. Housing market liquidity and sound lending are a function of homes priced at levels where buyers are able to make a purchase using a loan they will have a high probability of repaying.
The Fed’s and Treasury’s futile efforts to keep housing prices propped up are actually antithetical to a well-functioning housing market. That is why I find these futile efforts so puzzling — why stand in the way of market forces which will promote healing, rather than long-term malfunction?
“why stand in the way of market forces which will promote healing, rather than long-term malfunction?”
Commie!
(Said with utter look of shock on his face):
I thought I was standing up for mom’s apple pie, the American way, and restoration of the free enterprise system. How does my comment possibly suggest I am a commie?
The NAR pays me to hurl epithets at anybody wielding common sense solutions. Hey, I have to pay the rent, Stucco.
ah PB, you’re a fellow free market proponent! agree with everything you said. also, i answered your last question from yesterday. i said that reality with trump happy talk and fantasy. home prices will continue their fall..
“…free market proponent…”
Yes, subject to a rule-of-law, of course (as Adam Smith himself suggested).
“Affordable housing”
To clarify, I am talking about housing whose sale price is at a sufficiently low multiple of the buyer’s income so there is a very low probability the buyer will bankrupt his household by purchasing the home. I realize that some governmental agencies define ‘affordable’ quite a bit differently than this; hence the need for a clarification.
Ah, touche tj.
Well, that’s one way of clearing the land. Cali wildfire started by Mexican pot growers. I think they were working for Toll Brothers.
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/08/15/state/n220457D66.DTL&type=newsbayarea
One way to clear the land for another subdivision of McMansions. Go downwind and breathe.
I just love simple ambition, detraction, uglification and derision.
Examiner dot com San Diego
Report: D.C. mortgages are $149 billion underwater
August 16, 4:14 PM
With home prices still well below their peak of 2006-2007, one report shows D.C. mortgages with $149 billion in negative equity, according to First American CoreLogic. With a population of 5.3 million, that works out to roughly $28,000 per household as of June 30th.
Given that some of the households in D.C. are renters, and that more than one person lives in each household, it’s probably closer to $50K, but these are more or less ballpark numbers.
This is actually an improvement, as the percent of mortgages in a negative quity position went down from 32.5 percent at the end of March.
The total negative equity for the country is currently $3.4 trillion. Some of those mortgages will most likely be modified downward by the end of the third quarter, and hopefully home prices will continue to improve or at least not get any worse. Short sales will also reduce the total number of homes in negative equity.
According to the U.S. census, there were roughly 127 million “housing units” in 2007, with a 66 percent home ownership rate. The homeownership rate has since gone down, but another way to look at this number is that if there are 83 million owned homes, each home has about $41,000 in negative equity, but most of the negative equity is concentrated in Florida, Nevada and Arizona.
For buyers, this shows you that there are still going to be some “motivated” sellers out there, as the foreclosure rate has continued to be fairly strong so far this summer, and may remain elevated at least through the end of this year.
“Negative equity is a strong driver of foreclosures, [a CoreLogic economist] said, and the stunted growth rate in the second quarter is a positive sign that foreclosures may moderate in the future. First American CoreLogic made “very crude” estimates that the foreclosure rate will peak a bit higher than 4% in early 2010, he said.”
…
Short sales will also reduce the total number of homes in negative equity.
———————
Don’t foreclosures also reduce the total number of homes with negative equity? Wouldn’t they be a good thing, then?
Wall Street Journal
* AUGUST 14, 2009, 9:19 A.M. ET
FOCUS: Drop In UK Repossession, Bankruptcies No Turning Point
By Nicholas Winning and Ainsley Thomson
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)–Government pressure on lenders and other measures helped prevent a rise in U.K. home repossessions and bankruptcy and company winding up petitions in the second quarter, but actions against indebted homeowners and firms are expected to increase further as the recession drives up unemployment.
The Council of Mortgage Lenders said Friday that the number of U.K. homes that were repossessed fell to 11,400 between April and June from 12,700 in the first three months of the year as lenders showed forbearance to customers with payment problems and low interest rates helped ease their debt burden.
But although the number of repossessions in the first six months of the year is less than half the CML’s forecast of 65,000 for 2009 as a whole, the group said mortgage arrears and repossessions were likely to increase. There were 10,000 repossessions in the second quarter of last year.
“With unemployment rising and the economy still weak, the outlook will remain challenging for the rest of this year and into 2010,” Jackie Bennett, CML’s head of policy, said in a statement.
…
Ignore the puppetmaster, and focus on how the puppet talks and moves like a real boy. (The puppet’s name is Pinocchio, and he has a very long nose.)
Economic Preview
Aug 16, 2009, 12:01 a.m. EST
Housing hits a bottom
Housing starts and sales expected to rise modestly in July
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — Housing, which led the economy into recession, may be one of the forces that helps to pull it out of the ditch.
After 14 quarters of declining investment in homes averaging one percentage point of GDP per quarter, residential investments could actually add to the nation’s gross domestic product in the third quarter, economists say.
No one expects a renewed housing boom. But at least sales and construction spending aren’t falling any more.
Signs of stabilization abound:
* Home builders are gradually becoming more hopeful, even though surveys show most builders are still very discouraged. The builders’ housing market index has risen in four of the past five months.
* Housing starts have increased in four of the past five months after tumbling to a postwar record low. Building permits for single-family homes have risen at a 109% annual rate over the past three months.
* Sales of new single-family homes have risen three months in a row after falling to a record low in March.
* Sales of existing homes have risen four of the past five months, supporting by a government subsidy for first-time buyers and by sales of foreclosed homes.
Three of these key housing indicators will be released in the coming week, with the fourth arriving a week later. Economists surveyed by MarketWatch expect all four to continue to rise modestly.
“Home sales and construction are still at low levels, but evidence is growing that they are past their lows and beginning to rebound,” wrote economists for Moody’s Economy dot com. “Most influences on housing demand are still negative, but with the recession winding down it has become increasingly difficult to sustain the kind of weakness witnessed over the past couple of years.”
…
The Baltimore Sun > Business > Real Estate > The Real Estate Wonk
Poll results: Calling the housing-market bottom(s)
A plurality of you (there’s your word of the day) don’t think the Baltimore metro area’s housing market has hit bottom yet. But you do think prices and sales will stop falling around the same time.
That was the result of last week’s twin Wonk polls, which asked you to put on your forecasting hat.
The most popular answer was 2010 for a market bottom, both for sales (30 percent of votes) and prices (33 percent of votes).
Here are the rest of your answers:
For a bottom in home sales, 20 percent of you said “now,” 17 percent said 2011, 16 percent said not for years and 15 percent said by the end of the year. (If you add the “now” folks to the “end of the year” folks, you get a plurality of people who think sales have or will stop falling this year.)
For a bottom in average home prices, 26 percent said 2011, 22 percent said not for years and 18 percent said this year.
And one reader said “when we have 1999 prices” for both questions. (Darwin Rules, I presume?)
You had a lot to say about this topic, not surprisingly.
…
I just saw a house-to-be-flipped. The people bought it about a year ago, for cheap-for-the-bubble price, but still radically more expensive than it would have sold for pre-bubble. The house had really unattractive new white siding - which emphasized its tiny stature - and is on sale again.
There are still true believers out there.
In Central Maryland by the way.
Contractors have to grind on their suppliers and subs to make a buck in the declining market.
“Ignore the puppetmaster, and focus on how the puppet talks and moves like a real boy. (The puppet’s name is Pinocchio, and he has a very long nose.)”
I’ve got no strings
To hold me down
To make me fret, or make me frown
I had strings
But now I’m free
There are no strings on me
Hi-ho the me-ri-o
That’s the only way to go
I want the world to know
Nothing ever worries me
Hi-ho the me-ri-o
I’m as happy as can be
I want the world to know
Nothing ever worries me
I’ve got no strings
So I have fun
I’m not tied up to anyone
They’ve got strings
But you can see
There are no strings on me
Dutch puppet
You have no strings
Your arms is free
To love me by the Zuider Zee
Ya, ya, ya
If you would woo
I’d bust my strings for you
French puppet
You’ve got no strings
Comme ci comme ca
Your savoire-faire is ooh la la!
I’ve got strings
But entre nous
I’d cut my strings for you
Russian puppet
Down where the Volga flows
There’s a Russian rendezvous
Where me and Ivan go
But I’d rather go with you, hey!
* The Wall Street Journal
* AHEAD OF THE TAPE
* AUGUST 17, 2009
Why These Stocks Are a House of Cards
By MARK GONGLOFF
This week should bring more signs that housing is improving. It also might be a good time to unload home-improvement stocks.
Lowe’s, the second-biggest U.S. home-improvement retailer after Home Depot, is due to report second-quarter results Monday morning. Analysts estimate Lowe’s earned 54 cents a share, down 16% from 64 cents a year earlier.
Home Depot reports Tuesday. Analysts think it earned 59 cents a share, down 17% from 71 cents a year ago.
Though their profits are off, many investors have been expecting better days ahead. Lowe’s shares have jumped 68% since March 9, while Home Depot is up 52%, compared with 42% for the Dow Jones Industrial Average.
…
Homeowners try to spruce up their houses before putting them on the market, so rising home resales lead naturally to more trips to Home Depot and Lowe’s.
But a lot of good news already is priced into both retailers, which trade at roughly 18 times projected earnings for the next four quarters, compared with 15 for the S&P 500.
That makes them more vulnerable to disappointing housing numbers, still a strong possibility given unemployment and unrelenting foreclosures.
Better days are certainly ahead for housing, and home-improvement retailers will benefit when that happens. There also likely will be better opportunities to buy their stocks.
I went to Home Depot on Saturday afternoon. The place was dead. Only last year the place would have been jammed.
Are ya like me, folks? Is your head ready to explode if you hear the words “health care” one more friggin’ time?
HEALTH CARE! HEALTH CARE! HEALTH CARE!
It’s all health care, all the time.
11-08 time check
is it morning? health care for all? caint be…back to the bar rooms…
Watch out for your grandma’s back
Guess who’s back
Grandma’s back
Back again
Tell a friend (if you got one)
Everyone resort to the dance floor
So the stock market’s a crock, but if they let it fall where it should, a generation is wiped out–the biggest generation. Hmm… seems a danger in everyone investing in stocks for their retirement, no?
Sorry boomers, it’s nothing you did (well…), it’s your phat asss footprint that’s doomed us all! Consider this fake stock market your farewell present. Use it well…
My phat asss footprint?
Yeah, a lot of us decided not to make babies but turn to investing. Not enough of you young ‘uns around.
But wait…that’s myopic. There are other countries with rapidly increasing 20-somethings in areas where life expectancy is growing. Not in the USA.
Overseas investing, man!
If you don’t like world trade, like a follower of Palmy, well…pardon my dust.
“If you don’t like world trade, like a follower of Palmy”
First of all, Bill, I don’t think there’s anyone on the blog who is a “follower” of mine. Some may agree with my posts, but I don’t have any “followers”.
Secondly, I never said I didn’t like “world trade”. Countries have been trading with each other since time immemorial. What I don’t like is this thing called “globalization”, where countries are no longer sovereign entities, and the actions of rogue financial entities and transnational corporations can pollute and impoverish nations. And I despise wars of empire. Mankind is just not advanced enough at this time ethically or spiritually for one world gubmint.
But if everyone invests overseas, our stock market will collapse and destroy the Biggest generation’s retirement accounts. That’s my point–when everyone invests in stocks (and housing) for their retirement, the gov has to support the prices or they’ll get voted out. I’m fine with world trade if it’s fair for all involved. Shipping all our industry to China hasn’t worked out so great–That’s why the gov is busy propping up prices here. Overseas investment is the answer? Yeah, no manipulation in those transparent systems! No bubbles either.